The RBI performs a wide range of promotional functions to support national objectives
(i) Nurturing banking habits among the public
(ii) Grievance settlement measures
(iii) Agricultural development
(iv) Promotion of small scale industries
(v) Facilitates Foreign Trade
(vi) Supports Cooperative Sector

(i) Banker and financial advisor to the government
(ii) Monopoly of note issue
(iii) Banker's bank
(iv) Controller of credit and liquidity

Government of India on the recommendation of the RBI carried out demonetization on November 8, 2016 in order to;
i) To crack a whip against black money
ii) Drive out counterfeit currency in circulation
iii) Formalization of cash dependent business, and
iv) Dismandling the financial strength of terrorism and naxalism.

Government of India on the recommendation of the RBI carried out demonetization on November 8, 2016 in order to : -
i. Drive out counterfeit currency in circulation.
ii. To crack a whip against black money.
iii. Formalization of cash dependent business and
iv. Dismandling the financial strength of terrorism and naxalism.

Achievements of the RBI :-
i. RBI is one of the central banks in the world. RBI took proactive measures during global economic slowdown in 2008 - 2009 to save Indian economy.
ii. NABARD was once a subsidiary of RBI It is the first of its kind in the entire world.
iii. The demonetisation in 2016 - 2017 was a grand success because of the leadership role of the RBI.

(i) The methods which influence the total volume of credit in Indian economy are called quantitative or general methods.
(ii) An increase in the first three measures will reduce the volume of money in circulation in India and vice versa.
(1) Bank Rate Policy:
Bank rate refers to the rate at which the RBI rediscounts the bills given by the Scheduled banks.
(2) Cash Reserve Ratio (CRR):
It is the ratio of Cash reserves with the RBI kept by Scheduled banks in proportion to the total Time and Demand Liabilities with them.
(3) Statutory Liquidity Ratio (SLR):
It is the ratio of money and money equivalents kept within the bank in proportion to the Time and Demand Liabilities with them.
(4) Open Market Operations:
The RBI directly buys or sells the securities and bills in the money market either to decrease or to increase the total volume of money.

(i) RBI acts as clearing house and maintains a clearing system for all commercial banks in India.
(ii) The aggregate amount of cheques presented by a bank on other banks represents the claim by that bank on other banks.
(iii) Similar claims are made by all the banks on every other bank in the clearing. A net settlement is arrived at the clearing house and accordingly the debit or credit entry is made in their current accounts.
(iv) The cash reserves kept by the banks with RBI is utilised for this purpose. Clearing system saves time and eliminates paperwork and other difficult (otherwise tasks) tasks involved in inter-bank settlement.
(v) Though the RBI maintains the clearing house system only 14 clearing houses are owned by the RBI, 840 are managed by SBI and 6 by Nationalised banks (total 860).

The RBI is governed by a Central Board of Directors. The 21 member board is appointed by the Government of India. It consists of :
(i) One Governor and four Deputy Governors appointed for a period of four years.
(ii) Ten directors from various fields.
(iii) Two government officials
(iv) Four directors - one each from local boards.

Origin of RBI:
1. The imperial bank of India carried out the note issue and other functions of the Central Bank.
2.  In 1926 the Hilton-Young Commission or the Royal Commission on Indian Currency and Finance (J.M. Keynes and Sir Ernest Cable were its members) made recommendations to create a Central Bank.
3.  As a result, the RBI Act 1934 was passed and RBI launched in its operations from April 1, 1935.
4. RBI was established with a share capital of Rs.5 crores divided into shares of Rs.100 each fully paid up.
5. The entire share capital was owned by the private shareholders. Its head office was in Calcutta and moved to Mumbai in 1937.
6. After independence, the Government of India passed Reserve Bank (Transfer to Public Ownership) Act, 1948 and took over RBI after paying appropriate compensation to the private shareholders.
7. From January 1, 1949, RBI started functioning as a government owned central bank of India.
8. It had three departments. The RBI was the central bank of Burma until 1947, and the central bank of Pakistan until June 1948.

1. Banking Service is the nerve centre of industry and Commerce in a country.
2. It plays a vital role by providing the money required for their regular functioning and development.
3. The word Bank normally refers to Commercial Banks.
4. There are many types of banks rendering different types of services.
5. Central Bank is the most important one among them.